Deepak Kapur Profile picture
Sep 17, 2020 7 tweets 3 min read Read on X
Yesterday #snowflake IPO ~ $120. Closing share price ~ $250

Closing Mcap~ $70 bn
P/E: N/A
ttm P/S on close ~ 175x

By all reads / hears: Snowflake is a great biz & not a fly by night operator

So was Red Hat that did a IPO in 1999 : a short thread👇
In Aug '99 #RedHat went public. IPO~ $14. IPO day close~ $52.

Outstanding shares end August ~ 66.6 mn. ttm revenue ~ $13 mn. Loss making

So on IPO day close:

Mcap $3.5 bn
P/E: N/A
ttm P/S ~ 270x
By Nov/Dec the shares had touched ~ $140. Mcap > $10 bn

Due to exercise of ESOPS & conversion of preferred shares to common stock the total outstanding shares jumped to 153 mn by end Feb 2000

28 Feb 1999 shares were trading down at ~ $44. Mcap ~ $6.7 bn
Red Hat wasn't one of the many crappy companies that did an IPO in 1999.

from 1999 to 2108 its revenues went up ~ 275x a cagr of ~ 32%

it turned profit making & ended 2018 with almost $400mn profit

It was acquired by IBM in end 2018 for$34 bn
While company's biz grew at an amazing pace over years, the experience of shareholders was vastly different. Worst off were those who bought during 1st few months frenzy & held on - egged on by 'experts' confirming a 'new normal' :)

These folk took 12-18 yrs to break even !!
IPO boom of 1999 & subsequent bust was real. I See parallels in 2020. Many gr8 businesses r IPOing in US. eg #Snowflake. But frenzy causing absurd valuations. Fortunes may b made in short term. But if u don't get out in time & fall 4 'new normal' narratives - u will b minced meat
Some will give eg of Amazon: which even if bought at peak of '99 & held on, would've been a multi bagger

But remember: even Amazon crashed like mad in dot com bust

Patiently wait out a better price 2 buy gr8 cos that r currently at absurd valuations due to frenzy

That's it :)

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More from @tapak7

Oct 13, 2023
Going to give an example of the kind of hilarious stuff and madness going on in SME stocks.

Take Varanium Cloud Limited for example.


rev 377 cr, PAT 96 cr half year FY 24

rev 383 cr PAT 85 cr full year FY 23

While HY 24 + FY 23 PAT = 181 cr in 18 months, the cash flow from operations was only 7.7 cr😂
What do they do? oh apparently some big stuff
Read 14 tweets
Jan 14, 2022
Anatomy of pump

Read below thread & articles………

All identical. Many more links on net

Clearly co PR or cartel planting this misleading narrative on massive scale thru media/twitterati


How did the debt come down :

1) sale of stake held by co in Mindtree to LnT for ~ 2700 cr. This was actually done when VGS was still alive. just months b4 his unfortunate death

2) sale of real estate asset global village tech park to blackstone for approx EV 2000 - 2500 cr
3) CDE lost controlling stake in its subsidiary Sical Logistics as lenders invoked collateral shares. SCL had debt of 1500 cr which used 2 add 2 CDE consolidated debt

But no control = SL no longer subsidiary = it's debt can't show in consol debt of CDE. Just an accounting thing
Read 10 tweets
Apr 11, 2021

I can't tell you how important it is to calculate your PMS/ RIA / AIF annual performance on post tax basis. Use this no to compare against benchmark

Benchmarked performance shown by PMS/AIFs/RIAs (including on SmallCase) is usually post fees & costs but NOT post taxes
The reason most don't talk about post tax performance is that for each client the tax implications will be different. hence it's messy. Fair enough

Therefore as a client it's for you to go back & c what the performance was post tax
Usually an index is used as benchmark to compare performance. Remember, when any PMS/AIF/RIA uses an index as benchmark, they are in some ways comparing how their active investing worked against just buy & hold index strategy
Read 15 tweets
Mar 13, 2021
A thread on some observations from #Nazaratechnologies DRHP - largely to do with revenue analysis. The IPO notes of i-bankers aren't delving on these points. Since I noticed them, I am putting them out here.

(not an opinion or recco wrt to IPO)
Reported consolidated revenues:

Sep 2020 (6m) = 200 cr (~annualised 400 cr)
Mar 2020 (12m) = 248 cr
Mar 2019 (12m) = 170 cr
Mar 2018 (12 m) = 172 cr
Interesting insight into the 200 cr rev for 6 months ended Sep '20:

1) 79/200 cr is from segment 'gamified early learning'. This entire 79 cr is attributable to subsidiary, paper boat apps: makers of Kiddopia. Nazara owns 51% - acquired in '20. Entire 79 cr rev is from N America
Read 13 tweets
Nov 3, 2020
Not one #lauruslabs bull speaks or deep dives the balance sheet.

So as someone with no position (past, current or expected in future) in LL I am going to highlight a red flag 🚩 - that's bothering me

A short thread....
It's is the cash & cash equivalents (C&CE) on B/S in context of narrative, that for me, is a BIG🚩. Here r figures

C&CE (cr)
Mar 17 - 4
Mar 18 - 3
Mar 19 - 3
Mar 20 - 2
Sep 20- 2

vs Sales (cr)
Mar 17 - 1900
Mar 18 - 2050
Mar 19 - 2300
Mar 20 - 2850
Sep 20 - 4200 (annualised)
The working capital of #lauruslabs (Inventory + Trade Receivables - Trade Payables):

Sep 2020: 1250 cr
Mar 2020: 1080 cr
Mar 2019: 900 cr

To support its recent & projected growth, JUST THE incremental WC need is almost 1 cr per day !!
Read 13 tweets
Sep 3, 2020
#vodaidea is a delight to analyse from two perspectives: 1) #gametheory and 2) Soro's #reflexivity theory

some thoughts...
Competition would like Vodaidea gone. But Vodaidea has bought itself a couple of yrs of survival from AGR verdict as they will be able to raise enough funds to last a couple of years by convincing board that 'as ARPU's rise things will get better'
To kill Vodaidea competition needs to keep ARPUs low for 2 more years. But competition itself doesn't make enough money at these ARPUs. So will they want to self inflict pain for 2 more yrs?
Read 11 tweets

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